The Effects of Interfirm Ties on Illegal Corporate Behavior

32 Pages Posted: 3 Jun 2017

See all articles by Jamie D. Collins

Jamie D. Collins

Sam Houston State University

Christopher R. Reutzel

Utah State University

Date Written: Summer 2017

Abstract

Although numerous benefits are associated with interfirm ties, these external relationships can also have negative consequences. Theoretically based in the relational component of social capital, we identify one potentially serious consequence of interfirm ties, propensity of firms engaging in illegal behavior. Results of our study of S&P 500 firms suggest that companies benefit from a lower likelihood of illegal behavior when they have numerous weak ties to other firms. Conversely, when they become overly embedded in a network of strong ties, they are more likely to engage in illegal behavior. We also found evidence that reciprocity and status similarity influence firms’ propensity to engage in illegal behavior.

Suggested Citation

Collins, Jamie D. and Reutzel, Christopher R., The Effects of Interfirm Ties on Illegal Corporate Behavior (Summer 2017). Business and Society Review, Vol. 122, Issue 2, pp. 251-282, 2017, Available at SSRN: https://ssrn.com/abstract=2979664 or http://dx.doi.org/10.1111/basr.12117

Jamie D. Collins (Contact Author)

Sam Houston State University ( email )

Box 2056
Huntsville, TX 77341
United States

Christopher R. Reutzel

Utah State University ( email )

Logan, UT 84322-3530
United States

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